Post Office--United States Postal Service

(Cite as: 101 Misc.2d 533)
421 N.Y.S.2d 333
[IMAGE]View National Reporter System version
Joel J. Chait Plumbing and Heating Corporation, Petitioner,
Active Fire Sprinkler Corp., Respondent
Supreme Court, Special Term, Kings County
November 1, 1979
Post Office--Unites States Postal Service
(1) Sovereign immunity is not available in an action by a material supplier
against a subcontractor to a general contractor with the United States Postal
Service to prevent section 76 of the Lien Law from being applied to require the
subcontractor to furnish a statement to the supplier; the Postal Reorganization
Act allows the Postal Service "to sue and be sued" (US Code, tit 39, § 401,
subd [1]) and Congress, having removed the Postal Service from the political
sphere, has authorized it to act as an independent establishment with power
equivalent to a private business enterprise, and concomitant responsibility,
including full involvement with litigation.

(Cite as: 101 Misc.2d 533)
37 NY Jur, Mechanics' Liens § 164
16 Carm-Wait 2d, Establishment, Discharge, and Enforcement of Mechanics' Liens
§§ 97:388-97:392
[IMAGE]Lien Law §76
[IMAGE]53 Am Jur 2d, Mechanics' Liens § 332
[IMAGE]13 Am Jur Proof of Facts 571, Mechanics' Liens

Kenneth Kirschenbaum for petitioner. Trayman, Harris, Cantor, Reiss & Blasky
(Max E. Greenberg of counsel), for respondent.

{Running Header:MAJORITY OPINION }

Arthur S. Hirsch, J.
This proceeding was commenced by petitioner to compel respondent to serve a
verified statement pursuant to [IMAGE]section 76 of the Lien Law. Mr. Justice
Frank Composto by order dated May 3, 1979 directed respondent to serve said
verified statement. A statement was served but was rejected by petitioner as
defective. Petitioner then moved to punish for contempt for respondent's
noncompliance with Mr. Justice Composto's order. The motion came before this
court, which awarded petitioner costs while denying petitioner's motion on

(Cite as: 101 Misc.2d 533)
{Running Header:MAJORITY OPINION }
grounds, with leave to renew the motion on proper *534(Cite as: 101 Misc.2d
533, *534)
papers unless respondent served a proper verified statement within 15 days
after the service of the order.
The instant motion by respondent is to reargue the petitioner's motion to
punish the respondent for contempt and to deny petitioner's contempt motion and
further to dismiss the proceedings. The proceeding involves a construction job
which was to provide a facility for the United States Postal Service to be
located in the John F. Kennedy Airport. The realty upon which the facility was
constructed is owned by the New York Port Authority. The petitioner allegedly
furnished material to the respondent for use on the project; the respondent is
a subcontractor to a company which is the general contractor with the Postal
The logic behind respondent's request for reargument and dismissal of the
petition is that the court allegedly overlooked the fact that the Lien Law of
New York State can have no application in a situation involving a Federal
government construction. Respondent would claim the sovereign immunity long
associated with the Post Office Department and relies on [IMAGE]I. Burack, Inc.
v Simpson Factors Corp. (21 AD2d 481, affd [IMAGE]16 NY2d 604), a 1965 case
which, unfortunately for respondent's position, is outdated.
In 1970, Congress passed the Postal Reorganization Act establishing the United

(Cite as: 101 Misc.2d 533, *534)
{Running Header:MAJORITY OPINION }
States Postal Service, which was to operate in a "businesslike" fashion
[IMAGE](Standard Oil Div., Amer. Oil Co. v Starks, 528 F2d 201, 202). Among the
powers granted to the Postal Service was the power "to sue and be sued" (US
Code, tit 39, § 401, subd [1]). In a keystone case on the subject of statutory
"sue and be sued" clauses, [IMAGE]Federal Housing Admin. v Burr (309 U.S. 242),
that court flatly stated that sovereign immunity is disfavored. The court
opined that "it must be presumed that when Congress launched a governmental
agency into the commerical world and endowed it with authority to 'sue or be
sued', that agency is not less amenable to judicial process than a private
enterprise under like circumstances would be." [IMAGE](Supra, at p 245.)
In a more recent case, [IMAGE]Beneficial Fin. Co. of N.Y. v Dallas (571 F2d 125
[1978]), dealing particularly with the United States Postal Service claim of
immunity, the court explicated the concept of autonomy vis-a-vis
responsibility, stating that Congress, in removing the United States Postal
Service from the political sphere, had authorized it to act as an independent
establishment with power equivalent to a private business *535(Cite as: 101
Misc.2d 533, *535)
enterprise. The responsibilities which are concomitant with this new autonomy,
including full involvement with litigation, cannot be ignored [IMAGE](supra, at
p 128).
In accord with this concept, this court found that sovereign immunity is not
available in this proceeding and that New York State Lien Law may properly be

(Cite as: 101 Misc.2d 533, *535)
{Running Header:MAJORITY OPINION }
applied. As no law was overlooked by this court in the original motion, the
respondent's instant motion for reargument is denied. Respondent is directed to
comply with the petitioner's demand for a statement pursuant to [IMAGE]section
76 of the Lien Law. Upon failure on the part of the respondent to serve a
proper statement as set forth above within 15 days after service of a copy of
the order to be entered herein, petitioner may move to punish the respondent
for contempt on proper papers. The cost in the amount of $25, awarded in this
court's original order, remains in effect